Personally contacting my creditors
- Contact your creditors
- Where to start when contacting creditors
- Contacting creditors personally
- Contacting creditors through a professional
Personally contacting my creditors is this wise?
Summon your courage and start making your calls. You are undoubtedly the best person to convince your creditors what you are capable of doing. The fact that you have prepared a budget will help you be more persuasive during negotiations with them.
How much does it cost?
It does not cost anything to make arrangements with one or more of your creditors. Just contact them and negotiate. In fact, even if you negotiate a reduced interest rate, if you spread your payments out over a longer period you may incur additional costs. But a special debt repayment arrangement can make your life easier, and by honouring your commitments, you minimize the negative impact on your credit rating.
Before contacting your creditors here are some things to do and to remember
Before calling your creditors, determine which you think will be open to negotiation and which debts could have the biggest impact on your budget.
Refer to your budget. Your worksheet can be a useful tool to help manage the payments you have to make (download the PDF (PDF Version, 77 KB, 3 pages) or the RTF (PDF Version, 2.7 MB) version of the worksheet). Since this worksheet includes a complete list of your creditors, account numbers, account balances, monthly payments and payment due dates, it can help you plan your proposal. It will help you determine who you should pay and when, as well as what commitments you are able to make.
When contacting your creditors by telephone, make sure you write down the name and contact information of the people you speak with. You will need this information if you have to contact them again.
Make a clear proposal, based on your budget and how much you are actually able to repay.
Clearly explain your financial situation to your creditor so that they fully understand the extent of the difficulties you are facing. The key to success is to show good faith and your commitment to repay your debts. By showing that you are able to repay your debts, based on the budget you have prepared and with their cooperation, it will be easier for you to reach an agreement with your creditor.
It is advisable to get a written confirmation of the agreement. You can prepare a brief summary of your telephone conversation and send it to the person you spoke with (by fax or by registered mail). If the creditor does not honour the commitments made to you, contact the person that you spoke with again to find out why and how to rectify the situation, if required. Having a copy of the letter of agreement will facilitate the discussion.
If you would prefer not to contact your creditor by telephone, you can always send a letter by registered mail explaining your situation and the arrangement you are proposing (download the sample letter in PDF (PDF Version, 75 KB, 1 page) or RTF (807 KB) format).
Whatever method you choose (telephone or mail), be polite but persistent. Creditors will probably be less inclined to help you if you are aggressive, and remember, they are not obliged to make special arrangements with you.
If, after making the arrangements, you are no longer able to honour your part of the agreement, call your creditor as soon as possible and explain your new situation. You must try hard to maintain a good relationship with the person with whom you made the arrangements.
To access the Portable Document Format (PDF) version you must have a PDF reader installed. If you do not already have such a reader, there are numerous PDF readers available for free download or for purchase on the Internet:
Advantages of contacting your creditors yourself
This option can help you get through a temporary crisis and help you follow your budget goals during this time.
This option works well if you do not have many creditors.
Disadvantages of contacting your creditors yourself
Creditors will keep a record of the information you provided regarding your financial situation. They or other creditors may refuse to extend you credit or may limit your credit in the future.
You will pay more in interest charges if the debt repayment period is extended and there is no reduction in your interest rate.
